Civitas Resources: Piper Sandler Keeps Overweight Rating, PT Down to $54 from $57

Civitas Resources: Piper Sandler Keeps Overweight Rating, PT Down to $54 from $57

Civitas Resources Inc. (CIVI) has received a fresh evaluation from Piper Sandler analyst Mark Lear, who has maintained an Overweight rating on the stock. However, Lear has adjusted the price target (PT) downwards from $57 to $54. This revision comes after the company's second-quarter 2025 earnings report, which missed expectations, with net income dropping 42.6% to $124 million and EPS falling 38.2% to $1.34 [3].

The decline in earnings was attributed to lower revenue, cost pressures, and weak natural gas prices, particularly in the DJ Basin. Despite the weaker performance, the company outlined asset divestitures and a capital return strategy, including $435 million in DJ Basin sales and a $750 million share repurchase boost. CEO Wouter van Kempen emphasized free cash flow maximization, debt reduction, and ESG goals, with 7% production growth expected in H2 2025 [3].

Following the earnings report, the stock fell 4.03%, reflecting investor concerns over the near-term guidance and weaker performance. Piper Sandler's updated PT suggests a moderate upside potential, with the current consensus price target being $41.67, a 34.4% upside from current levels [1].

Civitas Resources remains undervalued, trading at low EV/EBITDA multiples and offering strong free cash flow and a solid dividend, according to various analyst reports [2]. However, the company's recent earnings miss and the subsequent stock price drop have raised questions about its near-term prospects. Investors should closely monitor the company's progress in implementing its capital return strategy and achieving its production growth targets.

References:

[1] The Globe and Mail. (2025). Analysts offer insights on energy companies: Civitas Resources (CIVI) and Chevron (CVX). Retrieved from https://www.theglobeandmail.com/investing/markets/stocks/CVX/pressreleases/34002222/analysts-offer-insights-on-energy-companies-civitas-resources-civi-and-chevron-cvx/

[2] StockAnalysis.com. (2025). Civitas: New Management Will Unlock Value For Patient Shareholders. Retrieved from https://stockanalysis.com/stocks/civi/

[3] AInvest.com. (2025). Civitas Resources 2025 Q2 earnings miss targets, net income drops 42.6%. Retrieved from https://www.ainvest.com/news/civitas-resources-2025-q2-earnings-misses-targets-net-income-drops-42-6-2508/